Assistance in Ascertaining Compliance With Law and Facts Concerning Construction of Bridge With Foreign Steel

Gao ID: CED-79-118 August 3, 1979

Questions were raised concerning the monitoring by the Federal Highway Administration (FHwA) of its buy American requirements in the award of a contract for the construction of a continuous segmented concrete bridge in Indiana. Contracts are awarded on the basis of the lowest bid for construction. State and FHwA officials do not determine life-cycle costs of concrete and steel bridges because maintenance costs are not a factor in awarding contracts. FHwA has no special provisions for monitoring compliance with its buy American requirements. These requirements, or state buy American requirements, if they are more restrictive, are made part of the construction contract and are considered the same as any other contract provision. The states are primarily responsible for monitoring contractors' compliance with contract terms.

It appears that the FHwA regulation pursuant to the Surface Transportation Assistance Act of 1978 manifests congressional intent. The buy American provisions do not apply where the Secretary of Transportation determines that such application would be inconsistent with the public interest. The Administrator, FHwA, determined that it would be in the public interest to temporarily waive the buy American provision except for structural steel. Indiana law would deny the use of foreign steel in state projects by requiring the contractor to use domestic steel unless not enough is produced in the United States for this particular bridge. However, there may be questions about the constitutionality of the Indiana statute in the event that there is a conflict between the statute and the multilateral foreign trade negotiations agreed to by the United States.

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